It has been more than 15 years – since the international financial crisis of 2007/2008 – that British productivity grows only by +0.4% per year, what is it half the increase of the main 25 member countries of the OECD (“Organization for Economic Co-operation and Development” based in Paris).
That’s why the real wages of workers grew less than 0% in the last 15 years, which implies this They stopped earning an average of £10,700 a year.
In turn, inequality has increased significantly, and the difference between that of London, which is the largest, and that of the north of England is now 4 or 5 times makes the UK the most unequal country in Europe, which includes Italy.
Combining zero per capita growth and high and growing inequality It has an absolutely negative meaning for low-income regions, with a practically total loss of expectations for young people between 18 and 29; and this is accompanied by an increase in extreme poverty which manifests itself in the consolidation of a marginal underclass, especially in the large cities of Manchester, Liverpool and Leeds.
So the middle class he is now 20% poorer than his German counterpartsand your income 9% less than the French ones.
The loss of productivity manifests itself at all levels: foreign trade as a share of product fell by -2.2 percentage points in 2023 compared to pre-pandemic levels (2019/2020), implying that the UK loses growing foreign markets in the United States, Canada and Japan.
The loss of expectations has repercussions on young people: there are over 9 million young people between the ages of 18 and 29 who have never experienced an economy with rising real wages.
At the time, the First Industrial Revolution (1780/1840), Britain was the leader in world manufacturing production, centered on the Manchester/Birmingham axis.
But then, starting from the Second Industrial Revolution, it experienced a terrifying process of deindustrialization that transformed those large manufacturing cities into ghost citybesieged by marginality and nostalgia, which in the UK is a lethal disease.
But in these inland cities there has never been a transition to a service economy, but rather simply the collapse and disappearance of manufacturing productivity.
According to calculations by the Center for Studies for Economic Results (CEP), to reverse this process in Manchester alone it would be necessary to increase social capital by more than 30% compared to current levels and incorporate at least 200,000 highly qualified workers into the population. .
This is not what is happening: over the last 40 years before 2022, Britain has had an investment level of 9% of output, the lowest among advanced countries and the lowest among G-7 countries.
The great leap in productivity that Margaret Thatcher unleashed in the 1980s – the last in historical terms in Great Britain – had as its counterpart an extraordinary increase in disparity between London and the rest of the country, which worsened over the next thirty years.
London has always been the capital of services (maritime transport, insurance, stock market system) and this meant that in the deindustrialisation phase of the Second Industrial Revolution, especially in its initial phase 1860/1913, London’s productivity was 60% higher to that of London. the rest of the country.
Then, under the government of Margaret Thatcher, the Tory leader unleashed the most profound deregulation of the City of London, and produced the memorable Big Bang, which forever ratified the structural inequality of the British economy.
This inequality manifests itself at all levels, and not just in income levels, but also in life expectancy, which is 10 years higher in the capital than in the British interior.
The situation can be summarized by underlining the productivity of the last 10 years it is the smallest since 1860 (+0.1%/+0.3% per year), and is due exclusively to the boom unleashed by Margaret Thatcher’s Big Bang.
The turning point of this collapse occurred in the Second Industrial Revolution. At the time, Britain bet on defending declining sectors such as coal and shipbuilding, and took refuge in London’s trade and banking. This was at a time when the United States and Germany were focusing on the auto industry and electricity.
In capitalist countries, the degree of optimism is revealed in the rate of investment and is directed towards allocating capital towards opportunities and not towards attempting to create security.
This is why in Great Britain productivity is not only an economic phenomenon but also a cultural one. It consists in the choice between the past and the future, which in the process of capitalist accumulation became synonymous with North American culture, and not with Great Britain, which at the time – irreversibly left behind – was the world’s leading manufacturing power and the center of innovation globally, particularly in Manchester, Birmingham and Leeds.
Source: Clarin
